Dell, IBM CEOs push for gov't focus on competitiveness

The CEOs of IBM and Dell have called on U.S. government leaders to put aside their differences and create a long-term agenda to promote innovation and improve the country's competitive stature in the world.

U.S. government leaders are too focused on partisan arguments and not focused enough on emerging competition from China, India and other nations, said both Michael Dell, chairman and CEO of Dell, and Samuel Palmisano, chairman and CEO of IBM during a Wednesday forum in Washington, D.C.

The government also needs to focus on its huge budget deficit and address its corporate tax rate, among the highest in the industrialized world, added Palmisano, speaking at a Center for Strategic and International Studies (CSIS) event.

"None of us could run those kinds of debts and keep our jobs," Palmisano said. "We are in a financial crisis, so let's wake up and act like it."

U.S. government officials seem to stay focused on partisan bickering while other countries are creating long-term plans for growth, Dell said. The partisan fights are "a formula for disaster," he said.

Dell and Palmisano were among a group of CEOs that met with U.S. President Barack Obama this week to discuss competitiveness and other issues. Obama addressed U.S. competition issues in his State of the Union address Jan. 25, and Dell and Palmisano both said they were encouraged that the president seems more focused on those issues than he has in the past.

During his visit to Washington, Palmisano has had to explain to "people who have never worked in the private sector" why a high corporate tax rate hurts investment, he said.

The U.S. government needs a champion to sell an innovation and competitiveness agenda to voters, Palmisano added. The U.S. has several advantages over the rest of the world, but it lacks a leader focused on creating an innovation agenda, improving education and working other competitiveness issues, he said.

"What is missing is someone saying, 'we're going to take the country from here to there,'" he said. "Then go out and sell the case. If you can't sell, and people say that's not what we want, then we have what we have today."

But John Hamre, CSIS president and CEO, repeated a recent criticism of many U.S. companies by questioning why they weren't reinvesting more of their recently high profits back into the nation's economy.

That question seemed to rile Palmisano. U.S. businesses, just like many consumers, have focused on reducing debt during the recent economic downturn, he said. "IBM's been around for 100 years," he said. "I don't want to be the guy who takes it down."

IBM continues to invest in research and development and other projects in the U.S., he said. But the U.S. government also needs to realize that it has other countries competing for jobs and investment, he said.

"Business can go anywhere in the world, growth flows anywhere in the world, and so does capital," he said. "The question is, 'why would they come here?' not, 'why aren't you spending enough?'"

Dell and Palmisano also repeated recommendations made by the Technology CEO Council last October to consolidate its IT infrastructure, reduce its energy use and move to more Web-based citizen services. The government could save US$1 trillion over 10 years by following the recommendations from the advocacy group, they said.

Government agencies can save huge money by consolidating their data centers, Dell said. "If [government officials] stand in the way of the enormous improvements in technology ... you do it at your own peril," he said. "You just lose relevance and you fall behind."

In some cases, agencies could get a return or 30 per cent or more on their investment when they consolidate data centers and take the other steps the tech group recommended, he said.

Dell said he doesn't understand how the government budgeting process works. "But I do understand really high ROI," he said.

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